A letter that says you are preapproved for a mortgage is key to successful house hunting and negotiating with a seller. It demonstrates that you have gone through an extensive verification of your financial status and concludes how much you are qualified to borrow. A preapproval document helps you determine what price range of homes you can consider and the type of loan that best works for you. It also identifies any obstacles to approval such as having too much debt or credit issues that need to be remedied.
While a loan preapproval is not required prior to house hunting, it will help assure those you are engaged in the process with that you are a serious buyer. Your real estate agent will be better equipped to take you to listed properties that you have demonstrated you are qualified to buy. Agents are also more enthusiastic when they know they are spending time with a buyer who has gone through the process to get preapproved for a mortgage.
A preapproval letter is not necessary when you make an offer on a home. In a seller’s market, if you want to be more competitive when submitting offers, having a preapproval when other contending buyers do not, will give you a strong negotiating edge. Sellers want to be assured that a buyer will be able to close the sale. A loan preapproval gives them peace of mind and they will take you more seriously as a potential buyer.
House hunting can be a nerve-racking adventure, especially in a seller’s market. Having your loan preapproval letter in hand will better target suitable properties and lessen the stress of successfully negotiating with a seller.
If you are buying a new home, contact me for an appointment so we can start the preapproval process and ensure you’re in the best position when you find a house you love.